Inflation and it's impact on my ability to buy a house!!

Davesnave

PasturesNew wrote: »

But here's a crazy price:
http://www.rightmove.co.uk/property-for-sale/property-20918281.html

New mobile home on a newly laid out small park of about 16 of them, right under an electric pylon. Surrounded by fields, road probably not made up to get that far (it wasn't when I was there), right beside the foot crossing over the railways where mental patients from the Victorian mental hospital next door would commit suicide .... £185,000.

The bird's eye/aerial shows this is the last one on the development and the road's in. But having 132 000 volts buzzing away by your back door is a serious down-side; not to mention the fact that they are plastic properties with no proper garden/privacy and a life span of about 50 years.

Secure ghetto for mature numpties who have no personal possessions. ...and they'll probably all be deliriously happy there.

But yeah, £189 000? You could buy a nice 'real' house for that.:rolleyes:

PasturesNew

Davesnave wrote: »

But yeah, £189 000? You could buy a nice 'real' house for that.:rolleyes:

Well, it was always an expensive area. I bought a van there to live in when I was 30 because even studios were £70k, lending was 3x salary and I was on about £12-15k (variable as job was changing often/I was temping).

I was priced out even in the 80s.

From the aerial view, I can see there's a proper road to it now, it used to be a pitch black, potholed farm track to get there.

sabretoothtigger

nearlynew wrote: »

Isn't it awful that someone like the OP should feel the way they are?

Wouldn't it be great if you could just buy a house when you were ready - when you got married or having kids or wanting to move out of your parents...... whatever reason.

Without having to consider what the market is "doing" or weighing up where interests may be going.

Nobody wants to pay more then they have to but going for the very cheapest price could be as big a mistake as holding for the highest price possible.

So if people can buy I suggest its better to look into doing so then holding plain cash indefinitely

The final stage of an economic collapse or debt deleveraging, etc will take place on cash.
Hedge funds
Investment banks
Normal banks
mutual societys
indebted companies
indebted countries
government debt
ordinary currencies

The progression of loss is through increasingly mainstream and normal holdings of wealth

Thats a 'roadmap' I read just after Bear Stearns went down March 2008.




http://www.investopedia.com/terms/w/whipsaw.asp

http://www.investopedia.com/terms/c/coiledmarket.asp

neas

ifi knew i would stay where i am for the next 10 years or even 5 years i'd buy a house.... atm i could move within a year or so... (am aiming for move in 2 years)... So i'd be caught by any of the combination if i bought now:

- Negative eequity or loss of equity
- Early redemption fees for breaking out of a fix (i'd only fix for 5 years +)
- House selling/buying costs twice (well selling once, buying twice)
- Impacted by raise in interest rates once i purchase 2nd house.

This being my situation its not worth buying even if the crash is slowing... cause i cant guarantte i'd be here in 5 years.

sabretoothtigger

You might become an accidental landlord if a house sale were not possible for whatever reason
My guess is the potential rent would outweigh the cost of a fixed mortgage, its another option anyway

I definitely understand the risk aversion to buying a house, my main point is that holding cash & renting seems even more risky imo

Thrugelmir

Harry_Powell wrote: »

When I first came into this forum I was alarmed by a thread that was urging FTBers to buy 'sooner rather than later' because what FTBers save with falling house prices, they will lose with much increased mortgage premiums (due to double digit inflation).

A lot of people posted retorts on the thread and I was quite relieved TBH and went back to waiting for prices to fall. However, recently I've been seeing more and more talk about inflation and it's now been mentioned in Martin Lewis' newsletter that fixed mortgage rates are climbing and that people should secure a cheap deal while they can.

I also saw this reported on another forum that I've just joined: http://ftalphaville.ft.com/blog/2009/06/01/56441/taleb-goes-long-inflation/

"A hedge fund firm that reaped huge rewards betting against the market last year is about to open a fund premised on another wager: that the massive stimulus efforts of global governments will lead to hyperinflation."

I'm back to being alarmed again. I have the funds in place for my deposit and could buy a decent house for myself and my girlfriend that's large enough for us to start a family in the future. Should we buy now and get a long fix mortgage? If we fix, then our monthly outgoings will be low and inflation will inflate away the debt. If we jump too soon and inflation doesn't get out of control, we will have paid over the odds for the house.

Argh!!! What are other people's views? What would you do??

I have been priced out of home ownership for years due to HPI, I don't want to run the risk of being priced out for years due to unaffordable mortgage payments!!

Why worry what a hedge fund is doing? Ok so they've opened a wager book. However being a hedge fund they offset the risk by investing in a contarian manner in something else. A book maker reduces his risks by adjusting his odds.

If you ever in doubt do nothing. Wait. These are turbelent times. A few months isn't long after a financial melt down that has never been experienced before. Don't get sucked into gambling.

If you are saving every month, then you are getting closer to the dream of owning a home for you and your family.

In many ways fixed rates are more applicable to those who already own their homes.

Inflation will only erode your debt away if your pay increases. In current circumstances I wouldn't rely on this. With the movement of people within the EU which we haven't had in previous recessions. This is something which in fact could be quite the reverse.

Davesnave

sabretoothtigger wrote: »

I definitely understand the risk aversion to buying a house, my main point is that holding cash & renting seems even more risky imo

I must admit that for all my bearishness about being a STR, I was pleased to find something to buy, rather than sit there with all my worldly worth in cash. I felt very uneasy. It couldn't happen till we'd found something appropriate though.

That's one thing this forum never mentions; the sheer difficulty of finding the right place, if your needs are not met by the standard type of house. At present, there's a low volume of property entering the market, so if you seek something a little different, it could still be a long wait.

Harry_Powell

We went 'carpet treading' today and had a look at some of the places we've had our eye on for a while. My GF really liked the look of a couple of the houses that we could move into straight away, while I really liked on that 'needed some modernisation'. It was a bit of a wreck, but looked structurally sound and was up at a decent price. We had an excellent mini-row about living in the 'sh ithole' as my GF politely called my dream home.

I must admit that now we've started the ball rolling and are looking at places, we feel really excited and very relaxed about the whole thing.

I'll keep you posted

nearlynew

Harry_Powell wrote: »

............................... We had an excellent mini-row about living in the 'sh ithole' as my GF politely called my dream home.

She's right there.

Living in a house while you are renovating it is a nightmare.


ps
Good luck regarding your house-hunting

PasturesNew

Harry_Powell wrote: »

...

Rule 1: never take your gf house-hunting, before you know it you'll be living somewhere you hardly saw and knee deep in cushions and choosing stuff you didn't even know existed or was necessary! She'll be wanting soaps that coordinate with towels and all kinds of crazy, crazy stuff